How much is self-employment tax in Indiana?

The self-employment tax itself is federal, not state. It is 15.3% — 12.4% Social Security plus 2.9% Medicare — applied to 92.35% of your net self-employment profit, with the Social Security portion capped at the $168,600 wage base for 2024. On top of that, Indiana charges its flat 3.05% state income tax (and county tax) on your business income.

Why is SE tax based on 92.35% of profit?

The 0.9235 factor removes the employer-equivalent share of FICA before the tax is applied, mirroring how an employee does not pay Social Security and Medicare on the employer's half. So you multiply net profit by 92.35% first, then apply the 15.3% combined rate to that smaller base.

Can I deduct half of my SE tax in Indiana?

Yes, indirectly. For federal purposes you deduct one-half of your self-employment tax (excluding the additional Medicare surtax) when computing adjusted gross income. Because Indiana starts its calculation from federal AGI, that deduction also lowers the income subject to Indiana's flat state tax. This calculator applies the half-SE-tax deduction to the Indiana base.

Do I owe Indiana county tax on self-employment income?

Yes. Indiana county income tax (LIT) applies to your Indiana taxable income, including self-employment earnings, based on the county you lived in on January 1. Rates vary by county. Enter your county rate to include it; if you leave it blank the tool shows only the state and federal portions.

Should I make estimated tax payments?

Almost certainly. Self-employed Hoosiers generally must pay quarterly estimated taxes to both the IRS and the Indiana Department of Revenue because no employer withholds for them. Use this estimate to size your federal SE tax and Indiana state and county liability, then divide across the four quarterly deadlines. Confirm thresholds with a tax professional.

Indiana Self-Employment Tax Calculator

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Working for yourself in Indiana means handling two layers of tax that an employee never sees on their own: the full federal self-employment (SE) tax of 15.3% and Indiana’s flat 3.05% state income tax, plus county tax. This calculator combines all of them, including the deductible half of SE tax, so you can size your quarterly estimates accurately.

How it works

Federal SE tax is applied to a slightly reduced base:

SE tax base = Net profit × 92.35% SE tax = 12.4% (Social Security, up to the $168,600 wage base) + 2.9% (Medicare on all)

You may deduct half of that SE tax when figuring income, which lowers the Indiana base:

Indiana taxable = (Net profit − ½ SE tax) − exemptions Indiana state tax = Indiana taxable × 3.05% (+ county rate)

The Indiana specifics

SE tax is federal. Indiana does not add its own SE tax, but it does tax the same business profit at the flat state rate.
Half-SE-tax deduction flows through. Because Indiana begins from federal AGI, deducting half of the SE tax reduces your Indiana taxable income too.
County tax applies. Self-employment income is subject to your county’s local income tax just like wages.

Worked example

A sole proprietor with $60,000 of net profit, single filer:

SE base = $60,000 × 92.35% = $55,410
SE tax = $55,410 × 15.3% = $8,477.73
Half deduction = $4,238.87
Indiana taxable ≈ ($60,000 − $4,238.87) − $1,000 = $54,761.13
Indiana state tax = $54,761.13 × 3.05% = $1,670.21

Note: This is an estimate, not tax advice. It does not include federal income tax on the profit. Add your county rate for the full Indiana liability and verify at irs.gov and in.gov/dor.